Understanding Location-Based Advertising How-To Guide

1. How-To Guide Understanding Location-Based Advertising By Kristen Maida, Research Analyst November 2013 EXECUTIVE SUMMARY According to a recent Nielsen study of mobile phone users (June – August 2013), 64% of mobile subscribers own a smartphone and 80% of the newest mobile users chose smartphones as their mobile device. In comparison to just three months prior, smartphone ownership is up 3% (www.nielsen.com). With smartphone ownership growing steadily by the quarter, the need for companies to focus more intently on mobile marketing strategies is now an imperative. As more marketers flood into the mobile marketing sphere, it is important for them to ensure their company’s mobile presence is competitive and relevant. In the ongoing battle to stay competitive and relevant during 2014, one of the most critical mobile marketing concepts organizations should evaluate is location-based advertising. Utilizing location-based data to illicit direct foot traffic to a brick-and-mortar location is as effective, if not more so, than email marketing coupons or online store discounts. This How-To Guide describes location-based advertising, how it can benefit your organization and suggests a few common location-based advertising strategies. © 2013 Demand Metric Research Corporation. All Rights Reserved.

2. How-To Guide WHAT IS LOCATION-BASED ADVERTISING (LBA)? “Location-based advertising (LBA) is a new form of advertising that integrates mobile advertising with location-based services. The technology is used to pinpoint consumers’ location[s] and provide location-specific advertisements on their mobile devices.” - www.wikipedia.org “Location-based advertising [involves] advertisements that are matched to your physical location. For instance, if you're a teenager and you're driving by the local mall, your cell phone may suddenly ring to notify you that there is markdown on sweaters, discounted just moments ago in a brand-name department store. That's a location-based ad” -www.netlingo.com BENEFITS OF IMPLEMENTING LBA Implementing LBA into a mobile marketing strategy can benefit many organizations. According to a recent Verve Mobile study (State of the Market: Location Powered Mobile Advertising Report), “advertisement campaigns that used location data performed twice as well as those that didn’t.” Some key benefits to implementing LBA into your mobile marketing strategy are: Targets Specific Audiences– By tracking the location and preferences of consumers, LBA increases the likelihood of your mobile ads reaching interested parties in the general area of your service/product. Tracks Patterns for Future Campaigns–Known as the “cookie of mobile,” LBA has become the easiest way to track click- throughs on mobile devices. Thus, LBA allows businesses to identify consumer patterns for future, more-targeted campaigns. Limited to No Cost for Implementation – Even the most advanced forms required to develop location-based services are much less expensive than traditional marketing methods. © 2013 Demand Metric Research Corporation. All Rights Reserved.

3. How-To Guide Enables Consumers to Choose Messaging– Intrinsically, LBA is designed to allow users to choose what ads/messages they receive. This has become extremely attractive to consumers since they feel empowered to pick the ads they want to see. COMMON LBA STRATGIES A wide variety of LBA strategies exist and each campaign requires a different network and/or combination of strategic ad placement. A few of the most common LBA techniques include: Geo-Fencing– Allows advertisements to reach LBA users in a defined area. This method is designed to increase foot traffic to a specific location. The Verve Mobile study (State of the Market: Location Powered Mobile Advertising Report)indicates that, “The data demonstrates a correlation between proximity and performance that suggests: optimal distance [is] between 1 and 6 miles, [the] sweet spot [is] between 2 and 5 miles [and there is] a significant drop off after 6 miles.” Geo-Aware Targeting– The foundation for location-based advertising, this strategy uses real-time location data furnished by mobile providers to send mobile ads to potential customers in the general location of the advertising vendor. Place-Based Targeting– Utilize a certain location and timeframe to remit mobile advertisements. An example of this may be a targeted campaign to the attendees of a sporting event at a specific stadium. ACTION PLAN: INTEGRATING LBA INTO YOUR MOBILE STRATEGY 1.Review your overall Mobile Marketing Strategy– Utilize our Mobile Marketing Plan Methodology to develop and or assess your Mobile Marketing Strategy. 2.Assess which mobile applications will work best for your organization– Download our Mobile Application Type Assessment Tool to help you evaluate whether a native smartphone application, a browser-based mobile application, or a combination of the two options will best suit your company. © 2013 Demand Metric Research Corporation. All Rights Reserved.

4. How-To Guide 3.Select a vendor to help you develop and launch a mobile app– Use our Top Mobile Marketing Resources Database and our Mobile Marketing Vendor Selection Tool to pinpoint the right vendor for your initiative. 4.Launch a mobile app to your community, clients and prospects– Read our How-To Guide entitled A Mobile App Launch Guide to understand how to properly implement and utilize a mobile app for business purposes. 5.Identify the LBA strategies best suited for your mobile marketing campaigns–Choose from the “Common LBA Strategies” listed above or continue researching on other strategies that may work better for your upcoming campaigns. 6.Develop a plan with your mobile app service provider to create a network of the proper LBA strategies for your mobile marketing campaigns. BOTTOM LINE The influx of smartphone users and mobile marketing campaigns calls for more competitive positioning when it comes to mobile ad placement. Location-based advertising is a great option to stay competitive. It is particularly cost-effective for companies with a mobile app already in place, easy to implement for mobile app providers and highly appealing to consumers. As a proven method to increase the success of mobile ad campaigns, adding location-based advertising to your mobile marketing mix is an easy decision to make, and one which is also easily implemented. © 2013 Demand Metric Research Corporation. All Rights Reserved.